Canada passes copyright law updates

The Parliament ofCanada last made significant updates to the country’s Copyright Act in 1997. Since then, three successive governments have tried and failed to pass bills that would update the legislation for the digital era and better align it with World Intellectual Property Organization (WIPO) treaty commitments. In June 2012, the legislature—the first majority government Canada has seen in years—finally succeeded in passing Bill C-11, the Copyright Modernization Act, and most of its provisions went into effect Nov. 7.

“The problem in copyright legislation is that it is always interest-driven,” says Sheldon Burshtein, an IP and technology law partner at Blakes. “The libraries, the jukebox industry, the cable TV and radio folks all have their own interests and bones to pick, so this has dragged along for 15 years of hearings and debate, with provisions added on and subtracted. And in those 15 years, the technology has changed dramatically, so it evolved as it went.”

Many of the changes reflect an attempt to make the Copyright Act more technologically neutral and to deal with a few specific copyright issues that have come to the forefront in recent years.

The resulting new provisions represent a significant shift in Canadian copyright legislation. Although a number of the changes have extremely narrow applications or deal with arcane details, the bill’s provisions also speak to various new institutions of the digital era, from iPods and YouTube to digital video recorders and technological protection measures.

Balancing Act

Canada strives to balance the rights of copyright owners and users, and in a bid for equilibrium, a great deal of the legislation’s provisions favor the user.

This doesn’t necessarily indicate an anti-business slant. In the tech space, for instance, many emerging companies rely on copyright flexibility and want to see more of it rather than less, notes Michael Geist, who holds the Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa. “They’re increasingly looking at the Canadian market as being one that offers up that kind of flexibility, and these new rules provide some new opportunities,” he says.

Taken together with the “copyright pentalogy,” the five cases Canada’s Supreme Court released as a package in summer 2012, copyright law in Canada has seen a significant expansion of user rights in the past year.

“A number of the revisions recognize what the courts have started referring to as users’ rights, and this is fairly new to Canadian law, which typically [focused on] the creators and copyright owners’ rights. The user was really considered more of a party that had access to creators’ works if they paid for them or if they otherwise fell under one of the exceptions,” says Rob McDonald, a partner at Fraser Milner Casgrain.

User Gains

The act’s fair-dealing exception, for instance, has been expanded to include education, parody or satire, which join the existing exceptions of research and private study, criticism, review and news reporting.

In addition, the amendments greatly expand exceptions for educational or training purposes. Taken in hand with one of the five copyright cases the Supreme Court handed down in July that allowed for photocopying and excerpting from books and textbooks for classroom or private study use, educational institutions are major beneficiaries of 2012’s copyright developments.

“We’ve seen some big moves toward a fair-dealing approach for the educational sector, and that has resulted in some real objections from the publishers and copyright collectives,” Geist says.

Another expansion for users is the new right of consumers to use, for noncommercial purposes, a published work to create a new work, subject to some conditions. This provision has been referred to as the “YouTube exception” or the “mash-up exception” because now users can, for instance, post a personal video recording to YouTube even if a copyrighted song is playing in the background or create a remix of one or more songs.

The legislation now explicitly permits (for private use) two additional new rights: format-shifting, such as putting a song purchased off iTunes onto an MP3 player, and time-shifting, such as recording a TV show to watch later.

“The truth is that everyone has been doing this for ages and no one sued,” Burshtein says, “but now it’s been reflected in the act that this is not infringement.”

Finally, although it’s not an expansion of user rights, the amendments have greatly reduced the potential statutory damages that copyright owners can collect for infringements with noncommercial purposes to $5,000 for all the infringements of a single proceeding for all works. Previously, the cap was $20,000 per work infringed.

Efforts to Appease

“You have two tracks,” Geist says. “For individuals and consumers, this is removing some of the fear of large-scale liability threats and questions about uses that [the government thinks] aren’t worth anybody’s time to worry about. And at the same time, they want to foster a vibrant market and have provided some new tools and powers to rights holders.”

These new tools and powers include a newly created “making available” right now afforded to copyright holders. This gives them the exclusive right to control the release of their works on the Internet, including through “on demand” services. The act also gives them “distribution rights” to control the first sale of every copy of their work.

A powerful new advance for copyright holders is a prohibition on circumventing digital locks, or technological protection measures (TPM), which control or restrict access to reproduction or copying of a work. This aligns Canada with the U.S. Digital Millennium Copyright Act, but many have argued it undermines some of the newfound freedoms and flexibilities the legislation provides to users.

In effect, “digital locks trump all users’ rights,” says Christopher Wilson, a partner at Bull Housser. “This gives the impression that the law favors owners, though only those with the budget and inclination to protect their content with digital locks.” The TPM issue now is copyright holders’ “digital trump card,” he says, and it’s to be seen how they use it.

Not all of the changes are controversial—it’s unlikely any television studios or networks are up in arms about the right to record a program. Others, however, have their detractors. Along with users’ concerns over the anti-circumvention rule, textbook publishers, for instance, aren’t pleased with the further expansions to educational exemptions. Many have suggested the “making available” right contradicts a recent Supreme Court decision.

It’s a sure thing, McDonald says, that some of the new provisions will face challenges in the coming years.

“The government was really trying to satisfy everybody as much as possible … on an issue that is almost by definition going to leave some people unhappy,” Geist says. “They attempted to provide most groups something on the issue they were most concerned with. And that, of course, meant for many groups giving up something in the end.”